11/11/2015 - EFRAG's Draft Comment Letter on the IASB's Draft Interpretation DI/2015/2 Foreign Currency Transactions and Advance Consideration
On 21 October 2015, the IASB issued the Draft Interpretation DI/2015/2 Foreign Currency Transactions and Advance Consideration (the 'Draft Interpretation') with a comment period ending on 19 January 2016.
The purpose of the Draft Interpretation is to propose the exchange rate to use when reporting transactions with a prepayment asset or a deferred income liability that are denominated in a foreign currency in accordance with IAS 21 The Effects of Changes in Foreign Currency Rates.
In its draft comment letter, EFRAG welcomes the guidance proposed in the Draft Interpretation, as it will help reduce the identified diversity in accounting for foreign currency transactions in which consideration was received or paid in advance of the recognition of the related asset, expense or income. EFRAG also agrees with the proposed consensus and believes it is consistent with the underlying principles in IAS 21 The Effects of Changes in Foreign Exchange Rates.
EFRAG requests comments by 13 January 2016.
EFRAG's draft comment letter can be accessed using the following link.